PDF Introducing BlackRock's Target Allocation ETF Models

Introducing BlackRock's Target Allocation ETF Models

Eve Cout Director, Managed Accounts Business Thomas Wood, CFA Lead Strategist, US Model Portfolios

Tuesday January 23rd, 2018

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

ICR0118U-406179-1292872

?BENEFIT # 1

Scale and simplify your practice

?Spend more time with clients. Routinize your client reviews. Clean up your book.

models

Models can help you transform your practice Hypothetical example

BEFORE models

AFTER models

100+ funds and individual securities Every client review is unique Time constrained

3-6 portfolios across risk profiles Consistent, efficient client reviews More time for planning, prospecting

Reduce

Investment management and administration from

40 to 20%

of your time

Potential transfer of time

450+ hours saved*

Increase

Client-facing activities from

60 to 80%

of your time

? * Cerulli Associates, "U.S. Advisor Metrics 2016: Combatting Fee and Margin Pressure." Time savings estimation assumes 20% time savings x a 45hr work week x 50 weeks per year = 450hrs saved.

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

ICR0118U-406179-1292872 2

?BENEFIT # 2

Manage fees with low cost ETFs and mutual funds

?Industry forces are driving advisors to reduce expense ratios.

models

Two forces driving fee compression

The "math problem"

4.13% 60/40 portfolio benchmark return*, past three years

? 1.02% Average advisory fee

= 3.11% What's left for the investor, before expense ratios and tax costs

New low cost competitors

Profile of the largest digital "Robo" advisor

30bps fee $108B AUM $400K average client size

Competitive performance

Over the last 5 years, iShares U.S. equity style box ETFs have outperformed 90% of active mutual funds?

Index the core with ETFs

Low cost

iShares ETFs cost 1/3 as much as the typical mutual fund?

Tax efficient

Over the past five years, only 5% of iShares ETFs have paid a capital gains distribution?

? As of 9/30/2017. Benchmark represented by 100% Bloomberg Barclays US Universal Index for fixed income, 60% MSCI ACWI Index, and 40% MSCI USA Index for equity. Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index.

? Average advisory fee as of November 2017. Source: . ? Largest digital advisor based on AUM. As of 6/6/17. Source: . ? ? See slide 16 for sourcing and important information.

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

ICR0118U-406179-1292872 3

?BENEFIT # 3

Implement a defined investment process

?Increased regulations continue to challenge your practice.

models

Adapt your practice to heightened regulations

BEFORE models

AFTER models

Different outcomes for clients with the same risk profile

Seek consistent client returns by risk profile1

"Orphan" funds on the books with no documented due diligence

Short list of ETFs/funds commonly held across clients

2016 FINRA disciplinary actions*:

1,434

disciplinary actions

$176.3

million in fines

$27.9

million in restitution to harmed investors

? 1 Returns can fluctuate by account. ? * 2016 Year in Review FINRA data -- newsroom/statistics. There is no guarantee that a models-based practice will prevent or reduce any business or regulatory risk.

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

ICR0118U-406179-1292872 4

BlackRock Model Portfolios

Our value proposition

Investment expertise simply delivered

Diversified, CostEffective Portfolios

Adapt to changing market environments, leveraging low-cost, tax-efficient ETFs

Institutional Capabilities Focus on consistency of results by leveraging BlackRock's to Individual Investors sophisticated risk analytics and technology

A Range of Outcomes

Offer a comprehensive model suite and resources to serve as your one-stop-shop for portfolio needs

FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR PUBLIC DISTRIBUTION.

ICR0118U-406179-1292872 5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download